Ineos-Conoco Deal May Flounder on Pricing
With permits from local authorities in England now in hand, olefins and polyolefins giant Ineos looks poised to start onshore shale gas exploration, though facing opposition from environment protest groups. For North Sea oil and gas exploration the going now looks tougher for other reasons.
A multi-billion dollar plan by Ineos to buy North Sea oil fields from US energy major ConocoPhillips appear to be on hold again, due to oil price uncertainties.
The Swiss-based, British energy-focused group has had to extend talks with Conoco for a second time as the would-be dealmakers have failed to agree on a package of North Sea fields.
According to reports, Ineos paid $300 million last autumn for the exclusive right to negotiate a sale with Conoco up to Dec 15. The deadline for agreement has now been extended to the end of January.
The fields were believed to be worth about $3 billion before oil prices plummeted to 18-month lows at the beginning of January.
A successful deal would catapult the chemical group to fifth place among North Sea players. How much success Ineos will have in shale gas remains to be seen, however as it faces hurdles not only from earthquakes and newly formed community groups dedicated to preventing fracking.
Beyond the massive protests that continue in Derbyshire despite the local councils’ belated green light, the 10 local authorities that make up Greater Manchester plan to create a “presumption” against fracking for shale gas, as part of an effort to become carbon neutral by 2038.